"Dairy cliff" threatens milk prices

POSTED: 05:16 PM PST Dec 28, 2012    UPDATED: 05:31 PM PST Dec 28, 2012 
PALM DESERT, Calif. -

In addition to the "fiscal cliff," there is another deadline looming, the so-called "dairy cliff."  If we go over it, the price of milk could double.

Congress has yet to pass the farm bill, the primary agricultural and food policy legislation for the federal government, and the deadline is now just days away.

Right now a gallon of milk costs between $3 and $4 but if Congress doesn't pass the farm bill by Monday, a gallon of milk could skyrocket, costing anywhere between $6 and $8 a gallon.

If there is no farm bill, a 1949 law would take effect.  It basically would force the federal government to buy dairy products at nearly double their current value.

Michael Marsh, the CEO of Western United Dairymen, says, "Instead of showing up in your grocery store, your gallon of milk would instead end up being shipped off to the federal government."

The short supply would eventually cause prices to go up until other countries brought in their milk.

"You might see dairy products from New Zealand, dairy products from Mexico, dairy products from China, trying to move into the United States marketplace," said Marsh.

People we talked to are certainly not happy at the possibility.

Pete Campa, a concerned citizen, says, "People that are making normal wages, hundred bucks a week, two hundred bucks a week, it's going to hurt them along with the price of gas.  My God, it's terrible."

Brent Morrison, a concerned citizen, says, "That probably could happen and regular person like us has no no say.  Everybody in there is [more] worried about if they are going to get elected than they are us."

Judi Lowry, a concerned citizen, says, "I am more concerned about the complete lack of government that we have.   I think double milk prices might be just the very beginning."

Luckily this doomsday scenario won't happen overnight.

"There won't be any change for consumers at the grocery store if you go to the store Dec. 31st or if you go to the store Jan. 1st," said Marsh.

If the deadline passes, it will still take the USDA months to implement, giving Congress more time to act.  

"They have had a year and a half to do it and haven't done anything," said Morrison.

Experts believe we won't go over the so-called "dairy cliff" because it's too important for Congress not to act.

"Simply from an economic standpoint, implementation of the 1949 law would not be good for the Treasury, would not be good for dairy farmers in the U.S., and would not be good for U.S. consumers," said Marsh.

"I think it's pathetic.  I am very concerned about the future of this country," said Lowry.